American Tower Balances 2025 Strength With 2026 Reset
American Tower Corporation ((AMT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
American Tower’s latest earnings call struck a cautiously upbeat tone, pairing robust 2025 results with frank acknowledgment of a tougher 2026. Management highlighted double‑digit Q4 AFFO growth, solid data center outperformance, margin gains and deleveraging, but also underscored the drag from the DISH default, Latin American churn and one‑time data center margin reversals.
Solid AFFO and Revenue Momentum in 2025
Attributable AFFO per share as adjusted rose about 8% for 2025 and more than 13% in Q4, underscoring strong cash generation. The gains were fueled by healthy leasing trends and effective conversion of adjusted EBITDA into AFFO, giving investors evidence that the core tower model remains resilient despite looming headwinds.
Property Revenue and EBITDA Growth with Margin Upside
Consolidated property revenue climbed roughly 4% year over year, or about 5% when stripping out noncash straight‑line items and FX. Adjusted EBITDA increased around 5%, closer to 7% on a cash and FX‑neutral basis, and consolidated margins widened by about 20 basis points, signaling disciplined cost control alongside modest top‑line growth.
Data Center Engine Fueled by AI and Interconnection
CoreSite continued to stand out, with data center revenue jumping approximately 14% in 2025 as AI and interconnection demand accelerated. Management expects around 13% U.S. data center revenue growth in 2026 and is targeting mid‑teens stabilized yields on new deployments, positioning this segment as a key long‑term growth driver.
Proven Efficiency and Ambitious Margin Expansion Goals
Since 2022, American Tower has delivered more than 300 basis points of cash tower EBITDA margin expansion across its global portfolio. With SG&A at roughly 4.5% of tower revenue, considered best‑in‑class, the company now aims for another 200–300 basis points of cash tower margin expansion over the next five years via land optimization and platform efficiencies.
Stronger Balance Sheet and Shareholder Returns
The company exited 2025 with net leverage at 4.9x, squarely within its 3–5x target range, providing balance sheet flexibility. Capital returns accelerated, including about $365 million of share repurchases in Q4 2025 and additional buybacks in 2026, while management signaled plans for roughly 5% dividend growth, subject to board approval.
International and European Growth Runways
Outside North America, organic tenant billings growth remains a key pillar, particularly in Africa and APAC where 2026 growth is expected around 8.5%. Europe should grow roughly 4% with continued newbuild momentum in markets such as Germany and Spain, while emerging regions still offer a long runway as networks densify.
Disciplined Capital Deployment and New Builds
For 2026, American Tower plans about $1.8 billion of discretionary capital deployment, roughly $1.9 billion in total. Around 85% will be channeled into developed markets and CoreSite, and the company expects to build around 2,000 new tower sites at the midpoint, focusing on projects with attractive risk‑adjusted returns.
DISH Default Weighs on U.S. Growth
The default of DISH on payment obligations prompted management to remove 100% of DISH revenue from organic growth from the start of 2026. DISH accounted for about 2% of consolidated property revenue and roughly 4% of U.S. and Canada property revenue in 2025, creating a roughly 4% churn hit to U.S. organic growth and a material drag on the 2026 outlook.
Muted 2026 Organic Growth Amid Churn
Guidance calls for consolidated organic tenant billings growth of about 1% in 2026, or around 4% when excluding the DISH impact. U.S. and Canada organic tenant billings are expected to grow only about 0.5%, or roughly 4.5% excluding DISH, translating into attributable AFFO per share growth of just about 1% before adjusting for the one‑offs.
Latin America Faces Elevated 2026 Churn
Latin America stands out as a pressure point, with organic tenant billings projected to decline about 3% in 2026. The region faces churn of roughly 8% and only modest colocation and amendment growth near 2%, and while management still expects a return to low single‑digit growth by 2027, they see 2026 as a more challenging year than previously thought.
Data Center Margins Normalizing After One‑Off Boosts
CoreSite’s cash margins are expected to contract around 270 basis points in 2026, largely because 2025 benefited from property tax adjustments and legal settlements that will not repeat. Management stressed that, excluding these one‑offs, data center margins should be more stable as newly built capacity ramps and delivers targeted returns.
Services Mix and Segment Dynamics Pressure Margins
Services delivered record contributions in 2025 but with a heavier mix of lower‑margin construction work that dilutes profitability. Combined with lower‑margin data center contributions, this mix partially offsets tower strength, with cash adjusted EBITDA margins guided to roughly 66.8% in 2026, down about 20 basis points year over year.
Refinancing, Taxes and Other Cost Drags
The 2026 outlook bakes in higher interest costs as maturing debt is refinanced at higher rates, along with rising cash taxes and minority distributions. These factors are expected to absorb part of the EBITDA growth and limit AFFO per share expansion, especially when layered on top of the DISH‑related revenue loss.
Noncash and FX Effects Obscure Underlying Cash Growth
Noncash straight‑line revenue will represent about a 2% drag on reported GAAP property revenue in 2026, while FX assumptions contribute roughly 1% to growth. Management urged investors to focus on cash and FX‑neutral metrics to better gauge the underlying performance and to separate structural trends from accounting noise.
Regulatory and Legal Overhangs Persist
Beyond DISH litigation, the company highlighted ongoing arbitration with AT&T Mexico, which could influence future organic growth in that market. These uncertainties represent potential upside if resolved favorably, but management is not embedding any benefit in current guidance, reflecting a conservative stance on legal outcomes.
Guidance Frames 2026 as a Transition Year
For 2026, American Tower expects about 1% consolidated organic tenant billings growth, or roughly 4% excluding DISH, with stronger contributions from Africa, APAC and Europe offset by Latin America declines. Property revenue excluding noncash items and FX should rise around 3%, adjusted EBITDA roughly 2% on a comparable basis, and AFFO per share about 1%, with normalized growth closer to 5% once DISH and refinancing effects are excluded.
American Tower’s earnings call painted 2025 as a year of strong execution and 2026 as a necessary reset amid customer‑specific and regional headwinds. With a solid balance sheet, defined margin expansion plan and secular demand from 5G, fixed wireless and AI, management is betting that near‑term turbulence will give way to a renewed growth phase later in the decade.
